1. Most of the credit cards in the hands of consumers in China are UnionPay and visa, UnionPay and MasterCard or UnionPay standard cards (UnionPay only), and there are also a few foreign currency cards, namely Euro cards, Pound cards and Yen cards. Visa or MasterCard can directly consume US dollars, and UnionPay can directly consume RMB.
2. If you consume currencies other than US dollars and RMB, such as Japanese yen, Australian dollar and Korean won. Visa, MasterCard and UnionPay all need to exchange money first. In this process, the so-called "money counting fee" is generated, which is also the currency exchange fee.
3. At present, UnionPay does not charge this part of the handling fee, while visa and MasterCard usually charge a handling fee of 1-2%. Of course, if you use visa or MasterCard in the United States, you don't need any currency exchange, because you trade directly in dollars, so there is no such thing as a handling fee.
Therefore, under normal circumstances, visa or MasterCard is the most cost-effective in the dollar area. Similarly, if you choose to use the corresponding foreign currency card in the corresponding country, for example, use the euro card in Europe and the RMB area, use the pound card in the UK, and now use the yen card. You don't need to pay any currency exchange fees, so swiping your card is the most cost-effective way.
Of course, in more cases, people often use visa cards or MasterCard and UnionPay cards when spending in non-US dollar areas. At this point, we must mention the exchange rate factor.
6. The exchange rate is produced in the process of currency exchange, which is determined by a large number of matching transactions of various trading entities in the foreign exchange market. Banks, monetary institutions and other institutions as well as foreign exchange dealers are the main trading entities in the foreign exchange market. The daily foreign exchange quotations of banks, banks and card institutions are actually the quotations of the institutions in the foreign exchange market. So different card organizations and different banks will have different exchange rates.
7. Take visa and UnionPay as examples. Visa buys local currency in dollars, and UnionPay buys local currency in RMB. Whether the transaction price is cheap or not depends on their bargaining power.
8. Therefore, the exchange rate of our credit card consumption will also change every day, and each card organization will update this exchange rate every day.